Managing transformation in the automotive industry: Watson is here to help

By | 10 minute read | February 1, 2017

Sport car

Today Harriet Green, General Manager, Watson Internet of Things, Commerce and Education, joined CAR-Symposium in Bochum, Germany to share exciting updates on IBM’s work with the automotive industry.

You can watch it here, or read Harriet’s summary blog below.

The changing market of automotive

The car industry is changing, and very dramatically. The way cars are designed, the way they are made, and the way they are experienced by consumers. Almost every aspect of what it means to be a car company or automotive supplier is being transformed by digital technology. From supply chains to connected cars to personalised driving experiences.

Traditional boundaries that defined this industry for decades are disappearing. More than 75 percent of automotive executives we interviewed expect new competitors and partners from outside the industry to become key influencers over the next decade. And 73 percent said that collaboration with other industries will be the centerpiece to growth strategies.

This requires innovation across the enterprise to develop products and services faster, speed manufacturing and to connect vehicles to the Internet of Things. All feeding performance data back through the value chain.

Harriet Green talking Watson IoT and transforming the car industry

Harriet Green talking Watson IoT and transforming the car industry

IBM and Watson: cognitive intelligence

IBM has a long history of working alongside the automotive industry. Combining innovation with industry expertise, and solving problems from the factory floor to the rubber on the road. Cognitive systems, like Watson, are the connective tissue that will aggregate, analyse and put to use every piece of data – structured or unstructured – from the moment a car is conceived to the day it is decommissioned.

Watson – the world’s most powerful cognitive computing platform – has been hard at work this past year, analyzing and predicting crime, personalizing early childhood learning, and even recommending the most effective treatments for some forms of cancer.

It is an undeniably transformational technology. We are already seeing it reshape nearly every aspect of the automotive industry, from the way cars are designed to the way they are manufactured, to the way they are experienced by consumers.

Watson: more than your average artificial intelligence

The technology industry is very focused right now on machines that learn. These applications can be very simple, like algorithms that recommend which movies to stream. Or chatbot software that guides you through a customer service engagement.

IBM’s Watson is much more than this. Watson is a cognitive computing platform. A comprehensive system of capabilities that includes visual recognition, language translation, personality insights, tone analyzer, natural language interface, trade-off analytics. Watson does more than learn. It understands. It reasons. And it interacts with humans naturally.

This is why Watson is having a transformative effect on the automotive industry. It’s not just a clever personal assistant on your smartphone. Watson is enterprise grade artificial intelligence.

And when you combine a computing platform this powerful with data from the Internet of Things, you can solve problems from one end of the supply chain to the other. From the manufacturing of the smallest of parts to the way the finished product is experienced by the customer.

Ball bearings that measure torque, temperature, speed. When we cognitively enable even the tiniest parts of these complex systems, everyone in the automotive ecosystem benefits. When it comes time for assembling these parts into a single, integrated system, every ounce of data can be the difference between success and failure; between a high yield and a total recall.

Cognitive manufacturing

Did you know that Watson can be trained to “see” defects in your production line? Watson can even learn to understand the root cause of those defects. And make suggestions on how to improve quality and reduce scrap rates.

This is cognitive manufacturing. And IBM are already working with several original equipment manufacturers and their suppliers to increase factory floor efficiency. To shrink the time between concept and prototype. To create a continuous design and development process, constantly feeding data to design and engineering teams from cars on the road.

Watson’s versatility allows it to strengthen every link in the value chain. From design, to manufacturing, to experience. And that experience – the experience of owning and operating a car – is going to change dramatically in the coming years.

IBM, General Motors and OnStar

Using the car as a platform for commerce is an innovative way for automakers to have direct daily contact with their customers. But we needed a technology that would make the marketing and transaction experience seamless and natural. This is why General Motors has partnered with IBM Watson.

OnStar Go will roll out this year on more than 2 million vehicles. It will use Watson to analyze data to learn a driver’s habits, to understand their needs, and to deliver targeted offers, from parking options to gas stations to local restaurants. Drivers will be able to pay for services through OnStar. And they will interact with it using the easiest interface in the industry: the spoken word.

ExxonMobil, Master Card, and Parkopedia are already signed up. And there will be many more ecosystem partners coming onboard this year.

It’s all part of an effort to help automakers deliver a more personalized driving experience. The kind of experience that consumers already enjoy in many other aspects of their life. The kind of experience where the things in our lives reshape themselves to our usage patterns, listen to us, learn from us.

These aren’t self-driving cars. They’re self-sensing cars. They sense their surroundings. They sense their condition. And they sense the behavior of their drivers.

Transforming the automotive industry

It’s more than a shift in technology. It’s a shift in thinking. And it represents a fundamentally new way of developing and delivering automotive experiences. Changes like these require more than just new features, they require new ways of working.

The software and services that will define the experience of owning a car in the future don’t follow the same development timeline as heavy manufacturing. And they require new partners and suppliers to make them work.

Think about the “ecosystem” that is forming around your industry: your suppliers, your technology partners, your employees and your customers. It is especially relevant as you work to bring new mobility offerings to the market that establish new revenue streams and business models for accessing vehicles – to stay competitive, and keep pace with change, this ever-evolving collection of inputs and outputs must be managed with efficiency.

The sharing of data across manufacturing and use of automobiles is only the first step. Communication and collaboration are essential in making the whole system work. You need more than just system integration. You need “ecosystem integration.” And this is what IBM does – brings agile development practices and design thinking to bear on the engineering of automobiles.

We’re employing this approach with Harman. With Harman, we have been practicing continuous engineering, working in two-week sprints to embed Watson into their speakers. By using this approach, our clients are typically able to develop cognitive applications in just 6-8 weeks.

Watson IoT Headquarters in Munich

It’s also about co-location of the many members of the automotive ecosystem. And tight collaboration between the automotive and technology industries. To this end, in two weeks, we will be opening our Watson IoT Headquarters building in Munich – the world’s first IoT co-laboratory, where clients and IBMers work together to solve problems and build IoT solutions.

Welcome to the Watson IoT global headquarters in Munich

Welcome to the Watson IoT global headquarters in Munich

It’s 67,000 square feet of pure potential, home to more than 1,000 of IBM’s brightest minds. And it’s part of a $3 billion commitment we’ve made in the work of cognitive IoT. BMW will be the first automotive partner to collocate at the headquarters. And here is a sneak peek at the work we’ll be doing together over the coming months…

To meet consumer expectations that are being set by software companies, we need to work more like developers than manufacturers. That’s the purpose of the Watson IoT Headquarters. We’ll be kicking things off at the center in two weeks, with a Genius of Things Summit, including several speakers from the automotive industry and many attendees from auto manufacturers and suppliers.

We will also demonstrate work from our AutoLAB, a joint operation between my Watson IoT team and IBM’s Global Automotive team. AutoLAB is a technology incubator designed to help clients connect, activate, and co-create new services quickly. It helps you act more like a software startup.

That’s how we came to work with Local Motors, an emerging disruptor focused on low-volume, distributed manufacturing of open-source designs. We connected Olli, their self-driving mobility shuttle to Watson in order to begin offering cognitive services. Through Watson, Olli will have the freedom to freelance where people are picked up and dropped off unlike similar shuttles that are locked into fixed routes. Through AutoLAB, we launched the first development of Olli in just 90 days.

The speed of change in automotive

We also understand that when change this dramatic comes to an industry this quickly, it can be unnerving. We understand the concern some in the industry have about managing the personal information of car owners. And we know that the prospect of deploying artificial intelligence – in both the factory and on the road – can be unsettling.

We at IBM have done this before. From online banking to retail to insurance to government, as well as with our automotive clients – in one vertical after another, we have introduced industry-altering technology, and shepherded the deployment of that technology with careful consideration of legal, regulatory, and social responsibility.

In fact, we are recognized as a leader in this regard. And we reaffirmed our leadership last month at Davos, when our Chairman and CEO Ginni Rometty introduced our three principles for the cognitive era:

1. AI systems developed by IBM will be designed to augment human capability, not replace it.

2. Our systems will feature transparency by design, allowing the businesses that deploy them to understand their functioning, reasoning, and judgement.

3. IBM will invest in helping clients engage safely, securely and effectively in a relationship with cognitive systems, and to perform the new kinds of work and jobs that will emerge in cognitive eco-systems.

Privacy, security, and working with IBM

Car makers are being asked to go beyond the “design, build, sell” business model that shaped the industry for decades. They are now being asked to manage the entire lifecycle of the car, including all of the IT security and privacy aspects of the modern vehicle. There are a multitude of laws worldwide that regulate personal information and privacy. We understand this regulatory landscape. This is why we continue to build out our world-wide network of cloud data centers.  We maintain more than 50 cloud data centers globally, including 16 across Europe, and can tailor data management practices in each geography to meet the compliance demands of that particular market.

We also understand that your data is more than just your IP; it’s your DNA. So we will never look to profit off of your data. You own it. We don’t.

As for securing that data, we are constantly advancing the science of security in and age of cloud and cognitive. We monitor more than 35 billion security events every day. And we are pioneering the use of blockchain across IoT-enabled products and services. Blockchain is a shared digital ledger technology allowing any participant in a business network to securely see the system of record.

Blockchain saves time with near instantaneous resolution of transactions, removes overhead and intermediary costs, reduces risk of tampering, fraud and cybercrime and increases trust through shared processes and record keeping.

All of this has enormous potential for automotive companies.  In the supply chain.  In the aftermarket for vehicle maintenance and parts, particularly as cars progress toward autonomous driving.  And in tracking how vehicles are used as they change hands.

All of this is our way of saying that we know the opportunities and the challenges that lay ahead, and we would like to help. We’d be delighted to share what we’ve learned from the digital journeys other industries have taken. And to put our own automotive experts to work in service of your cognitive, cloud, and IoT needs.

So come to us for our experience. Come to us for our industry expertise. And of course, come to us for Watson.